Start Planning Now for Next Year's Tax Return

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The tax deadline may have passed but planning for next year can start now. Being organized and planning ahead can save time, money and headaches in 2013. Here are a few helpful tax tips you can do now to make next April 15th easier.
1. Adjust your withholding
Why wait another year for a big refund? Now is a good time to review your withholding and make adjustments for next year, especially if you'd prefer more money in each paycheck this year. If you owed at tax time, perhaps you'd like next year's tax payment to be smaller. Use the IRS's Withholding Calculator or get more information from their Publication 919, How Do I Adjust My Tax Withholding? at their website, irs.gov2. Store your return in a safe place
Put your 2011 tax return and supporting documents somewhere secure so you'll know exactly where to find them if you receive an IRS notice and need to refer to your return. If it is easy to find, you can also use it as a helpful guide for next year's return.
3. Organize your recordkeeping
Establish a central location where everyone in your household can put tax-related records all year long. Anything from a shoebox to a file cabinet works. Just be consistent to avoid a scramble for misplaced mileage logs or charity receipts come tax time.
4. Review your paycheck
Make sure your employer is properly withholding and reporting retirement account contributions, health insurance payments, charitable payroll deductions and other items. These payroll adjustments can make a big difference on your bottom line. Fixing an error in your paycheck now gets you back on track before it becomes a huge hassle.
5. Shop for a tax professional early
If you use a tax professional to help you strategize, plan and make financial decisions throughout the year, then search now. You'll have more time when you're not up against a deadline or anxious for your refund. Choose a tax professional wisely. You are ultimately responsible for the accuracy of your own return regardless of who prepares it. Find tips for choosing a preparer at www.irs.gov, Tax Topic 254: How to Choose a Tax Return Preparer.
6. Prepare to itemize deductions
If your expenses typically fall just below the amount to make itemizing advantageous, a bit of planning to bundle deductions into 2012 may pay off. An early or extra mortgage payment, pre-deadline property tax payments, planned donations or strategically paid medical bills could equal some tax savings. See the Schedule A instructions for expenses you can deduct if you're itemizing and then prepare an approach that works best for you.
7. Strategize tuition payments
The American Opportunity Tax Credit, which offsets higher education expenses, is set to expire after 2012. It may be beneficial to pay 2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500, before it expires. For more information, see IRS Publication 970, Tax Benefits for Education.
The IRS emphasizes that each household's financial circumstances are different so it's important to fully consider your specific situation and goals before making large financial decisions.
Source: Special Edition Tax Tip 2012-07
At Taxbrain, you have access to our free, easy-to-use W-4 Withholding Calculator and Refund Calculator to help keep you on track with your tax strategy. Within your account, manage your charitable donations easily - with over 100,000 donation values based on fair market values. Not only that, Taxbrain account holders can access and print their completed tax returns anytime, anywhere. Sign up for your free account today. Visit Taxbrain.com

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